Adithya Sambamurthy/The Bay Citizen

A Prop C poster at a gathering of supporters on election night, November 8, 2011

San Francisco's labor unions won a high-stakes battle for control over how the city will reduce its retirement costs.

Proposition C, a union-backed pension reform measure, crushed a competing initiative authored by Public Defender Jeff Adachi. With 100 percent of the precincts reporting, Prop. C was winning 69 percent to 31 percent. Adachi’s measure, Proposition D, was losing, with 66 percent voting against it and 34 percent in favor.

At a time when unions are under attack across the country, Prop. C's victory is a testament to labor's continued strength in San Francisco.

Last year, city labor unions combined forces to thrash Adachi’s previous pension reform measure. This year, the unions joined interim Mayor Ed Lee and business leaders to craft their own version of pension reform — and again provided money and muscle that Adachi could not match on the campaign trail. 

But by the time news of the victory reached the Prop. C election party at Slim’s nightclub, most of the crowd had already left to attend the multitude of mayoral parties. The celebration was muted considering the wide margin of victory.

“It’s a subdued party because there was a certain amount of confidence already that our message was resonating with voters,” said Thomas O’Connor, the head of the city firefighters’ union.

And also because of this: city employees will be contributing between 7.5 percent and 13.5 percent of their salaries to their pensions. The increased contributions will save the city $1.3 billion over the next decade.

“This is a victory, but it’s a hollow victory because we're giving a huge chunk of our paychecks to the pension fund,” said O’Connor. “We know we're doing the right thing, but it’s a hardship.”

Meanwhile, Adachi, whose lonely campaign last year brought attention to the $4.4 billion the city will owe in retirement payments over the next decade, said he was pleased that San Francisco had at least done something to help erase part of the looming bill. His measure would have saved the city $1.7 billion over the next 10 years. 

“It's a very small step, and the downside is that people may think the pension problem is solved when it's not,” said Adachi, who also ran for mayor. “Last year we were arguing about whether or not there should be any pension reform at all, this year we had two pension reform measures. That's progress and that's leadership.”

A USF/Bay Citizen poll last month predicted that Prop. C would beat Prop. D, although not by such a wide margin. The poll also found that people in labor unions or with union members in their family were more likely to be in favor of Prop. C.

"San Francisco is a labor town," said Jim Ross, a political consultant. "They were able to defeat pension reform last year, and they did the smart thing this year, which was to come back with a compromise measure they were able to pass because the union members bought into it."

To be sure, the support of Lee, the business community and the entire political establishment was also crucial to Prop. C's success, Ross said.

At polling stations Tuesday, it appeared that the unions' stamp of approval helped San Francisco voters make up their minds on the complex issue.

“I think it's important to have a reform that has the support of all the people involved that are going be affected,” said Jacob Kramer, a voter who lives in the Mission. “It’s necessary, but it’s also painful, so it’s something that needs to be carefully done.”

Police, firefighter, and other city worker unions poured hundreds of thousands into the Yes on C, No on D campaign, which raised more than $1 million. Financier Warren Hellman, who helped guide Prop. C negotiations, plunked down $200,000 on the campaign and paid $200,000 for an actuarial study. (Hellman is chairman of The Bay Citizen but plays no role in editorial operations.)

Union foot soldiers walked the city three times, campaigning and handing out literature. On Monday, the day before the election, janitors from the Service Employees International Union piled into a Tenderloin labor hall, each taking thick stacks of “Yes on C” literature to hang on doorknobs.

Adachi’s financial backers, venture capitalist Michael Moritz and businessman Greg Hume, contributed $250,000 each at the beginning of the race. But in the month leading up the election, the Prop. D campaign raised almost no money, as Adachi focused most of his campaign efforts on his last-minute mayoral bid.

Some of those who ended up voting for Prop. D were not fans of unions. Jonathan, a CEO who lives in the Marina District and declined to give his last name, said that union support for Prop. C had made him wary from the start.

“Any time you look at a pension reform initiative, you really want it to be driven by a commercial interest and not a liberal interest,” he said.

Some rank-and-file city employees led a charge to vote against any pension reform. Arthur Kalson, a retiree who lives in the Mission, voted against both measures because his wife is a city employee.

“She's been a librarian for 30 years,” Kalson said. “If either of those measures pass, it will take a significant chunk out of our income, probably making it impossible for us to live in San Francisco.” 

Kalson blamed Adachi for spurring the pension reform wave in San Francisco, calling him “anti-union” and “anti-worker.”

"City workers are the people that keep the city running, and they are being disrespected,” Kalson said. “I resent it as a resident of this city.”

Even with the bitter acrimony over pension reform, one thing is for sure: the critical, complex and decidedly unsexy issue actually piqued the interest of San Francisco voters.

When asked if he was bored or interested by the pension reform debate, Kramer, the other voter from the Mission, answered without skipping a beat: “Definitely very interested.”